[ Ссылка ] - Hey everybody, I’m Rob Freeman and today we’re talking about CPACE and how, if you're a real estate investor, you can use CPACE to add value to your buildings, reduce risk and maybe save money on insurance premiums too…

If you’re not familiar with it, CPACE is a type of commercial real estate financing you can get to make clean energy and efficiency improvements in your buildings.

The acronym CPACE stands for commercial property assessed clean energy. And CPACE programs are popping up all over the US... Basically, with CPACE you can borrow money to invest in renewable energy or energy efficiency improvements such as new LED lighting, building control systems, variable frequency drives, new HVAC systems, solar panels, small wind, geothermal, energy storage, etc. for your building.

Basically any investments that would help you save money on energy, electricity or water to reduce your operating costs, a CPACE loan can be applied to.

What makes a CPACE loan better than a conventional type of financing for capital improvements? There are three primary differentiators... 1) Loan to Value, 2) Amortization Period and 3) Savings to Investment Calculation.

#1 is loan to value. With CPACE you don't have to put money down in some cases. So you're getting a 100% LTV.

#2 is amortization. A conventional bank loan might give you a 5 or 10 year amortization period, followed by a balloon payment or refinancing. With CPACE you can amortize out as far as 30 years. This lowers your payment considerably.

#3 is the savings to investment calculation. You can do a simple calculation to determine if your energy efficiency, water efficiency or renewable energy investments will pay for themselves on day one. This means you're in the black, essentially... and profiting on day one from a more efficient building. For no money out of pocket!

So, if you don’t have capital to make improvements to your building, you shouldn't let that stop you because you can get 100% of the money you need from a CPACE lender, amortize it over a long period of time and as long as the savings outweigh the cost to repay the loan, you're making money.

Finally, some of these improvements that you can make to your buildings can help reduce the frequency and/or severity of common property and liability claims at your buildings. Water related claims, such as flood, leaks and burst pipes are common sources of property claims. If you install a water monitoring system with CPACE financing, you may be able to get your property insurance carrier to give you a reduction in your premiums. In some cases, insurance carriers may pay for the cost of the system. Or if your building is still using old T-12 fluorescent bulbs that are inefficient and constantly need to be replaced, you can upgrade to LEDs that are brighter and more efficient and last longer. This is less time for maintenance people to be up on ladders. Falls are a significant cause of workers compensation claims. Other lights that can be replaced are metal halide bulbs which can cause fires under bad conditions because of the high temperature at which they burn.

This is just some examples of the types of ways you can add value with CPACE that may reduce the number, frequency and severity of insurance claims you have at your properties.

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